Going Electric

I'm tired of even thinking about the lunatic political leaders in this state, so I'm going to take a short break and focus on the innovators, those who have the ability to drag us out of recession and toward a new economic future.

For starters, Tesla Motors, which last year was thought to be in a fair bit of trouble, has come out of that and has begun to receive orders for their new $50,000 sedan model.

San Carlos, California-based Tesla Motors said it has received 711 reservations for its new Model S, an all-electric family sedan that carries up to seven people and can travel up to 300 miles per charge.

Tesla said reservations - which include a refundable $5,000 fee - started coming in after the car was formally unveiled on March 26. Mass production of the Model S is expected to begin in late 2011.

The company said the Model S will go from zero to 60 miles per hour in 5.6 seconds, with an electronically limited top speed of 130 mph. Three battery pack choices will offer a range of 160, 230 or 300 miles per charge. The company has not released pricing options on the higher-mileage battery packs.

The anticipated base price of the Model S is $49,900, after a federal tax credit of $7,500.

One high-profile buyer is Governor Schwarzenegger himself, who will turn in the Tesla roadster he had previously purchased in exchange for the sedan. The goal of Tesla is to bring a model into the $35,000 and under market, essentially on par with a Lexus, within the next couple years, and with the federal tax credits and complete lack of gas costs, that would be an attractive option for a pretty broad section of the upper and upper-middle class. Tesla reminds me of the Wild West early days of the auto industry, when lots of small manufacturers competed for business and the competition drove innovation.

Outside of the auto realm, the California high speed rail Authority hopes for up to $4 billion in federal dollars to jump-start production.

The American Recovery and Reinvestment Act approved by Congress in February contains $8 billion to be doled out to states for development of high-speed rail service and passenger rail service among cities.

California wants half.

"As of now, we have close to $4 billion worth of things we can show can be done within the time limit" of the act, said Mehdi Morshed, executive director of the California High-Speed Rail Authority, the agency charged with building a speedy rail line connecting Northern and Southern California through the Central Valley.

Morshed and other California boosters are trying to make the case with federal transportation officials that when it comes to high-speed rail in the United States, the Golden State is king.

"All factors considered, we are at the top," Morshed said. "We are the only ones with a real high-speed rail project. Everyone else is just improving their current (conventional) rail service."

While the $10 billion in bonds authorized by last November's Prop. 1A (the good one) have yet to be sold on the open market, federal stimulus dollars would really help get HSR off the ground. And such an investment would get some of the preliminary work out of the way and spur private investment, which would be looking toward a shorter lead time for their payoff. Our friends at the CA HSR blog, including some guy named Robert, have more. You can quibble with the strength of the SacBee article, but you cannot deny that the President has made high speed rail a priority and California's entity is clearly the furthest along, suggesting that we will be in line for a good portion of those stimulus dollars.

Despite political dysfunction, innovators will allow California to move to a new economy based on clean energy and efficiency. Hopefully the political leaders will follow, having failed to lead.

Car Market Competition

Nearly lost in everything else this busy week, the President has hinted at more aid for the auto industry, albeit with major conditions.

The aid package for the companies will be unveiled in the next several days, he said, and will be contingent upon the companies adopting business plans that reflect the fact that they have a smaller share of the auto market.

"We will provide them some help," Obama said during an online "town hall" event.

"I know that it is not popular to provide help to autoworkers -- or to auto companies -- but my job is to measure the costs of allowing these auto companies just to collapse," he said [...]

"If they're not willing to make the changes and the restructurings that are necessary, then I'm not willing to have taxpayer money chase after bad money," Obama said. "And so a lot of it's going to depend on their willingness to make some pretty drastic changes. And some of those are still going to be painful, because I think you're not going to see a situation where the U.S. automakers are gaining the kind of share that they had back in the 1950s."

I think that's essentially right. The auto market has fractured and we can no longer expect the US industry to be sustained by the government at the same level. By the way, the creditors, specifically the bondholders, have to understand that as well. Everyone's going to have to take a haircut, and then we'll have some good old-fashioned competititon.

Just this week, India's Tata Motors released the world's cheapest car, but that will be confined to the local market unless it includes safety measures to allow it to be sold in the US. The electric market in this country is starting to heat up, from the 200 mpg Aptera, a futuristic three-wheeled vehicle which is trying to change its status as a "motorcycle" (which disqualifies it for certain tax breaks for consumers), to Tesla's just-released $50,000 sedan, the cheapest all-electric vehicle currently on the market. The prices will continue to drop through increased competition, spurring innovation. It feels a little like the 1920s, with a proliferation of smaller car companies competing for market share. That's probably better for consumers, and since the competition is playing out on fuel economy, better for the environment as well.

What Was That About Small Businesses?

Tesla Motors is feeling the economic crunch.

Tesla Motors, the fledgling maker of electric sports cars, admitted today it is losing money and in a “critical phase” financially. An undisclosed number of Tesla’s 250 employees will be laid off (and the current chief executive will move to the board of directors), and its Detroit-area office will be shut down.

Further delays and setbacks for the company’s production and growth plans were also announced. Interestingly, these developments come at a time when the public’s interest in electric cars seems to have taken off, given the reaction to General Motors’ recent showing of the production-ready Chevrolet Volt and the introduction of several new electric protypes at the Paris Motor Show this month.

Elon Musk, the Silicon Valley entrepreneur who has been the chief investor in Tesla, said in a blog posting Wednesday on the company’s Web site that with SpaceX, his separate project to develop private-enterprise rockets for outer space, having achieved its first successful launch, he now has more time to devote to turning Tesla into a profitable venture.

This is really awful. Tesla has a dealership by the 405 freeway in West LA, and Governor Schwarzenegger pushed really hard to keep their production in California. Right now their brand is pretty high-end, though they were moving toward making a sedan version, so that could be part of their troubles. The cars, however, are amazing. Faster than a Porsche and can go hundreds of miles on a single charge. They have had some fits and starts with mass producing them, but clearly their future appeared to be bright until the recent economic woes.

What's keen to keep in mind here is that the major auto companies just got a $25 billion dollar bridge loan from the federal government to keep producing the garbage cars they make. Here's a company pushing a green technology and bringing it to market faster than anybody else. I hear all this talk in the election about small businesses being the backbone of America and here is one. So where's their help?

May Day Happenings

Tomorrow is May Day, and the combination of anniversaries - the traditional holiday for workers (that started in the United States, it is most certainly NOT a Communist holiday), a day of action in the Latino community, and the 5th anniversary of "Mission Accomplished" - means that there are goings-on all over the state tomorrow.

• Latino groups will stage a May Day rally for immigrant rights tomorrow in downtown Los Angeles. You may remember that last year's event in Macarthur Park ended in chaos with tear gas and brutality marring a peaceful protest. The cops have actually been practicing and preparing so that there are no such incidents this year. Organizers expect anywhere between 25,000-100,000.

• There's at least one budget cut/fee increase protest being planned at Cal-State Northridge, organized by students. It should start around 12:00 on the bookstore lawn. I believe this is part of a continuing action by students to raise awareness about the crime Arnold Schwarzenegger wants to commit on public education this fiscal year. There's more at The Alliance for the CSU.

• On the anniversary of "Mission Accomplished," True Majority and CREDO Mobile are teaming up to deliver the Responsible Plan to End The War in Iraq to incumbent House members, and urge them to sign on to the bills in the plan that have already been proposed. The House leadership is planning on cravenly offering more money in the war supplemental than even George Bush asked for, funding it through 2009 without any checks or conditions. This is dead wrong, and there are steps Congress can take right now to rein in military contractors, aid in the humanitarian crisis, and increase regional diplomatic efforts, instead of allowing Bush to muddle through and pass off the disaster to his successor. You can find one of the 210 events in your area by clicking this link.

• The west coast chapters of the International Longshoreman Worker's Union (ILWU) is planning on shutting down all west coast ports on May Day to protest the ongoing occupation of Iraq. Information on Bay Area events is here. There's also information at this blog. This is the biggest general strike I can remember, and coming from longshoremen it can hardly be considered the work of dirty hippies. This is a very important event.

• And in what may in the final analysis be the most revolutionary event, word has it that Tesla Motors will open their very first store tomorrow in West LA, on Santa Monica Boulevard just east of the 405 Freeway, which paradoxically is one of the most congested spots in the city. Tesla has created an electric vehicle that runs like a sports car, and in future years their sedan model will be relatively affordable while getting the equivalent of 135 miles per gallon. As this event is the closest to me, I might actually get to this one. :)